If you are planning to buy a home, a common first step is to compare mortgage rates. If you’re a first-time homebuyer, you may be wondering what exactly a mortgage rate is and how it will impact your purchase. We can provide answers to those questions and so much more. It’s our goal to provide a fast, easy mortgage process from the application to the closing for everyone from first-time homebuyers to seasoned homeowners. We want you to feel comfortable and confident with the process. The less you spend on your mortgage, the more you can spend on other important things in your life.
What is a mortgage rate?
A mortgage rate is the interest rate on your home loan. There are many factors that go into deciding what your interest rate will be when securing a mortgage. These include the Federal Reserve, inflation, the yield on the 10-year Treasury note, the mortgage company’s specific fees and your credit scores. Your monthly mortgage payment will include the interest you owe on your outstanding loan balance and a portion of the principal itself.
Are mortgage rates the only aspect to consider when choosing between lenders?
A 4% mortgage rate versus a 3% mortgage rate may not seem like a huge difference, but a one-percentage point difference translates into at least a 10% difference in the monthly mortgage payment. Although your rate and monthly payments are a large factor when choosing a mortgage, it is also important to focus on the level of service different lenders provide. Take into consideration the level of expertise of the loan officer. Are they knowledgeable about new laws and regulations regarding home loans? Ask about the speed of the process before making a final decision. Consider the lender’s reputation, ability to provide guidance for a smooth transaction (especially for a first-time homebuyer), and other costs, such as points and fees, and APR.
How does the interest rate differ from the annual percentage rate (APR)?
The interest rate is the rate on the loan itself and does not take into account closing costs. The APR is the interest rate with the closing costs and credits accounted in. The APR provides a more direct comparison across loans if the same types of costs are included in each home loan.
Why choose Guaranteed Rate?
At Guaranteed Rate, we have simplified the mortgage process. Whether you’re buying a new home or refinancing your mortgage, we find ways to keep the mortgage rates we offer lower than our competitors without sacrificing high-quality customer service. We pride ourselves on providing our customers with low mortgage rates and low fees.